(Bloomberg) — Brazil’s JBS SA is moving closer to a long-awaited share listing in New York after a deal with its second-biggest shareholder.
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The equity holding arm of Brazil’s state-owned lender BNDES, which owns almost 21% of JBS, will refrain from voting on the plan at the company’s upcoming board meeting, removing the biggest hurdle for JBS’s listing, according to a regulatory filing. The deal was reached with J&F Investimentos SA, which controls the world’s largest meat producer.
The unusual agreement calls for BNDESPar to receive as much as 500 million Brazilian reais ($87.9 million) should JBS’s US listing not bring the share appreciation expected, according to the filing. The companies didn’t disclose what that strike price is but said it must be achieved in the second half of 2026.
JBS has argued its valuation is currently capped compared to its peers Tyson Foods Inc., Hormel Foods Corp. and its US subsidiary Pilgrim’s Pride Corp. because the company isn’t listed in the US and can’t be part of indexes such as the Russell 2000 Index and the S&P 500. The company previously said a New York Stock Exchange listing could boost its market value to $30 billion, up from about $12 billion now.
JBS, controlled by Brazilian billionaire brothers Joesley and Wesley Batista, is valued at 4.3 times its 2024 earnings before interest, taxes, depreciation and amortization. That is expected to rise to 4.5 for 2025. Still, that’s below the 6.2 multiple for 2025 of its US subsidiary, Pilgrim’s Pride, and Tyson’s multiple of about 8.5 for the same year.
To be sure, there’s no guarantee a US listing would close the gap in valuations between JBS and its peers, as the agriculture market faces a downturn. There’s also the risk that President Donald Trump’s trade wars with China, Mexico and Canada could deepen that rout.
Rival Smithfield Foods Inc., the largest pork producer in the US, saw its stock price fall below the range offered in its initial public offering earlier this year. The company and an indirectly owned subsidiary of its backer, Hong Kong-listed WH Group Ltd., sold about 26 million shares to raise $522 million.
Still, the BNDES deal is a win for JBS, which has been seeking a US listing for more than a decade. In 2016, the lender vetoed a restructuring plan that would have seen JBS list its stock in New York. BNDES has also in the past tried to oust the Chief Executive Officer Wesley Batista.
